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Oct. 19th, 2006 | 03:30 am

"These large corporations have the internal characteristics of a planned economy. Information flow is systematically distorted up the chain of command, by each rung in the hierarchy telling the next one up what it wants to hear. And each rung of management, based on nonsensical data (not to mention absolutely no direct knowledge of the production process) sends irrational and ass-brained decisions back down the chain of command. The only thing that keeps large, hierarchical organizations going is the fact that the productive laborers on the bottom actually know something about their own jobs, and have enough sense to ignore policy and lie about it so that production can stagger along despite the interference of the bosses.

When a senior manager decides to adopt a "reform" or to "improve" the process in some way, he typically bases his decision on the glowing recommendations of senior managers in other organizations who have adopted similar policies. Of course, those senior managers have no real knowledge themselves of the actual results of the policy, because their own information is based on filtered data from below. Not only does the senior management of an organization live in an imaginary world as a result of the distorted information from below; its imaginary world is further cut off from reality by the professional culture it shares with senior management everywhere else. “…in a rigid hierarchy, nobody questions orders that seem to come from above, and those at the very top are so isolated from the actual work situation that they never see what is going on below.”12

The root of the problem, in all such cases, is that individual human beings can only make optimally efficient decisions when they internalize all the costs and benefits of their own decisions. In a large hierarchy, the consequences of the irrational and misinformed decisions of the parasites at the top are borne by the people at the bottom who are actually doing the work. And the people doing the work, who both know what's going on and suffer the ill effects of decisions by those who don't know what's going on, have no direct control over the decision-making."

-Kevin Carson, Studies In Mutualist Political Economy (In print: page 322, online: http://www.mutualist.org/id88.html )

The book: http://www.mutualist.org/id47.html

Journal Of Libertarian Studies' Symposium Issue on Studies in Mutualist Political Economy: http://www.mises.org/jlsDisplay.asp?action=sort&volume=20&number=1&submit=View



This is one of the most significant things Carson's book has to say. This has been my experience in the work world. The exception being when I wasn't working for some large corporation. The two small businesses I worked for gave me the almost daily opportunity to express my concerns to my boss. In one case, I was half his work force! Therefore my observations had much more weight than in my current job working for another corporate monolith.

There is, however, one major element he doesn't emphasize. Management, at each level, has to take responsibility for the laziness and ineptitude of subordinates. I have refused to be promoted in my current job because I experienced this as a manager trainee and assistant manager. Despite this, I have been functionally having to act as management. The managers don't make the other employees do their jobs. If I try to manage them without official authority, they ignore me. If I run to to the boss, I am a snitch. If I do the work they neglect (which is what most often happens), I don't take as many tables. I am also doing work I am not being paid for. I also build up resentment towards people I have to work with, which is not healthy. If I throw up my hands join them in neglecting my work, I debase myself by sinking to their level. Beyond that I foster a workplace which is not welcoming to customers, who I depend on for tips.

In light of all this let's consider this sentence:

"The root of the problem, in all such cases, is that individual human beings can only make optimally efficient decisions when they internalize all the costs and benefits of their own decisions."

This goes just as much for those at the bottom as those at the top. Josiah Warren's theory and successful practice of equitable exchange (which is the main predecessor of the American individualist tradition which Carson is a part of) came from bad experience in New Harmony. New Harmony was a Utopian commune established by Robert Owen. According the idea of equitable exchange, all exchanges should be in equivalent amounts of labor, hence his use of labor notes as a medium of exchange instead on standard money. If one person works more than another, that person is being exploited. The strength of his theory is that this applies just as much to a capitalist who derives income from charging consumers more than it cost to bring something to market (which he considered usury) as it does to a "fellow worker" who lives off the work of someone who picks up his slack because of need to complete a project both are working on. One of the things that drew me to Marxism was the Bible verse which says "He who does not work should not eat". I rejected it for the exact same reason. Communism applies this verse only to capitalists (the "parasites at the top"), and not to one's "comrades". Capitalism applies it to workers and not capitalists. Mutualism, on the other hand, applies it to everyone. In the words of Proudhon "To each according to his works, first; and if, on occasion, I am impelled to aid you, I will do it with a good grace; but I will not be constrained" (The Philosophy of Misery). I doubt Carson would object to anything I've said here, since it's all implied in his philosophy, but it would be nice if he said so explicitly. I'll send him an email to inform him of this post.

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(no subject)

from: funkyirishjew
date: Oct. 19th, 2006 02:56 pm (UTC)
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okay, I'm lost on some things.

How is money NOT an accurate measure of the labour needed to produce a good or service. The more value the work/service has the higher the price for it. In Example: Buying the material and man power hours to build a fence costs 100 x. To do it myself and my family costs 75 X, but the time spent doing the labour would make me lose 80 X, so it is more efficent to hire out to have the fence built for 100X.

The number of persons who can build a fence is limited, and the number of them that can do it well is less. These experts in fence building cost more, because the market will bear their skill.

"A Josiah Fence will hardly ever need repair."

It seems that the money not be an accurate measure of labours worth you are referring to is the modern fiat system, which is horrible, but a money system based on something of acutal worth, ( such as silver, Gold, Rice, oil etc ) would seem to be tied to that goods worth rather than inflation.

The problem I see with the labour notes is who decides what labour is worth more? For instance. Who decides the compartive value between a doctor's skills and a truck driver. The truck driver is ALWAYS in need, the doctor is largely only needed when something "goes wrong", so an arguement can be made that despite the intensive training needed to be a doctor the truck drive is actually of more worth.

Although I have seen work situations where no one is telling the boss something they don't want to here, the majority of jobs I have had for large corperations DID respond to my concerns. Granted, most of the large corperations I worked for were not retail or manufacturing, but the service we provided, the alarm monitoring company comes to mind, INSISTED that all managers be hired from within and promoted based on proven ability ( as decided by internal testing. ) Respectfully, I think it's disingenious ( ? ) to state that ALL employees of the manager level aren't being kosher with their bosses.
or that the concerns of the floor staff aren't being listened to.

As for management taking responsibility for the laziness of subordinates, that's unfair. No One can really be held accountable for someone elses actions UNLESS you are supervisining them all the time. Most of the companies I have worked for, even the retail bookstore, awarded innovation and superior judgement with raises and bonueses. When I worked for Starbucks, (which I believe we can all say is a large corperation ) I knew the District manager for the Southeastern united states BY NAME, and had his email address. Many of the recipes you will see in the starbucks menu where created by employees who were bored and they "made their way up" the ladder.

but then again Starbucks may not be the model for most buisness realities, since it is still the only provider I know that will give a 20 hour a week part timer FULL medical, 401 K, and stock options in the company.

What is the name of this book? Perhaps if I read it I can get a grip on what the author is trying to say. I can "sense" something vital in it, but I can't quite grasp it.

Trying to understand
-FIJ


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chris_acheson

(no subject)

from: chris_acheson
date: Oct. 19th, 2006 07:57 pm (UTC)
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Labor notes are just like any other commodity currency. They're backed by the issuer's promise to provide the specified good (labor, in this case) when the note is redeemed. Notes issued by different people/organizations can have different market values.

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okay...but...

from: funkyirishjew
date: Oct. 20th, 2006 05:52 am (UTC)
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a dollar is worth a dollar whereever I go.

A labor note for a hours worth of plumbing service may not be actually worth an hours work of plumbing if I have to give it to, say, a plumber.

taken another way.

If Labor notes are based off the time taken, lets say I need an orchard's produce collected. The labor to do it manually is more time consuming than to get in a machine and collect them that way, so who much is the labor worth and whom determines the value.

I guess what I am saying is that when a currency is compared to a good, and that good is considered to have an intrinsic value ( think of gold ) then I can compare how much my service / labor is worth to the availbility of the currency.

Now, if I have to calculate how much labor is worth compared to other labor it seems that I am constantly going to comparing inequal kinds of service. The Truck driver to Doctor example comes to mind.

Wouldn't it also flucate depending on where I am? If I need a sweater knitted, and I'm somewhere with no wool, it is harder to get. So a labor note from that location would be of relatively high value neh?

But if I then move to where both knitters and wool are plentiful, the labor note would seem to be worth less?

Am I just misunderstanding how the exchange here will work?

-FIJ

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chris_acheson

Re: okay...but...

from: chris_acheson
date: Oct. 21st, 2006 11:15 am (UTC)
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Well, a dollar is a dollar, so I guess it is worth that much. The real question is what else a dollar is worth.

For simplicity, I would guess that the face values of labor notes would be standardized on unskilled manual labor. So of course you're not going to get an actual hour of skilled technical labor for a 1-hour note. The face value just refers to what the issuer promises to provide you with, not what you can trade it for.

Trading in gold notes has the same issues that trading in labor notes does. To determine the value of a gold note, you must consider the reliability of the issuer, the quality/purity of the gold backing the note, the location of the issuer, and the relative value of gold compared to the various goods that you want to trade it for.

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John

Re: okay...but...

from: johnny_red
date: Oct. 21st, 2006 06:08 pm (UTC)
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a dollar is worth a dollar where ever I go.

What a dollar is worth, it's underlying value, is another dollar. You recognized the problem with this in your first comment. A dollar is supposed to be a receipt for the commodity which takes on the function of money, which you provided examples of. The commodity takes on the function of money because people agree that it has value for other reasons. This is true in all the examples you provided earlier. Let's say that a dollar is a receipt for (is worth) a pound of rice. The farmer has to learn how to farm, has to raise the crop, and then bring it to market. If he sells it to an intermediary, such as a shopkeeper, the shopkeeper has to exert his own efforts to become a shopkeeper and then do the work of running his shop. All of this is labor. The rice has, embodied in it, a certain cost in human effort. So the rice backed dollar is, indirectly, a labor note. When someone spends a dollar, he is spending the effort he exerted to obtain that dollar (this part even applies to our real world dollar).

What about labor notes? Let's look at the example of the orchard. You buy the machine in labor notes. Let's say that one note equals and hour of labor. If there is one manufacturer, Mr. 8, and it takes him 8 hours to make the machine (hence the name). You pay 8 notes for the machine, which is a promise of 8 hours of work. Imagine if there are two more manufacturers. Mr. 8 and Mr. 12. If the quality of their work is the same, you'll buy from Mr 8. The other two will have to work more efficiently to get future business. What if Mr. 8 does the shoddiest work, Mr. 10 does middling work, and Mr. 12 does the best? How do you know this? Let's say you checked Consumer Reports, the Better Business Bureau, or you talked to some other farmers. You'll have to decide what level of quality you want. The labor note ends up being worth the labor which one party to the exchange decides is most valuable in terms of your his own labor, and vice versa.

How is this different from how things work with a rice dollar? It's more direct. If you buy the machine in rice dollars, you decide how much rice it's worth to you. The external goings on in the rice market affect your decision. The question of how much labor the machine is worth is not the first thing you consider. It's value in rice dollars is. It's obscured by the commodity. If the promise of future work is the commodity, it's less obscure. Future labor is directly relevant to everyone involved in the production of a good or service. The same holds true for the manufacturer with regards to how many labor notes he will accept.

When human effort is considered at the point of the transaction, a better cost-benefit analysis can be made. Josiah Warren first demonstrated this by the operation of his Cincinnati Time Store, where he charged for the time he spent with the customer instead of including it in the price. According the Wikipedia entry on the subject:

"After a rough initial period, the store proved to be very successful. Warren's goods were much cheaper than competitors', though he maintained that he was not trying to put other stores out of business. Another store in the neighborhood converted to Warren's methods. The fact that prices for goods rose the more time a customer spent with Warren resulted in very efficient transactions. Warren said that he was doing more business in one hour than normal businesses do in one day, leading him to close shop part of the day to rest."

I'll continue in a separate comment.

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John

comment continued

from: johnny_red
date: Oct. 21st, 2006 06:08 pm (UTC)
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All that being said, it's worth pointing out that Warren's labor notes had an alternate backing. They also could be redeemed for a certain amount of corn. So a person could choose to trade the note for corn or labor. There are also Local Exchange Trading Systems (LETS) in use today, which use labor notes. One example is Ithaca Hours, used in Ithaca, New York. One Hour, which is one unit of currency, is worth both $10 and one hour of labor. Someone holding an hour can choose whether to buy Federal Reserve Notes with it or whether to use it as he would use those notes.

All currencies operate in a wider context in which there is more than one currency, labor notes are no exception. This is also true for the dollar, in the context of the world economy. However, there is an artificial money monopoly generated by the state. If governments couldn't say that a single currency must be honored for "all debts, public and private" alternative currencies like Ithaca Hours and Liberty Dollars would be in wider use. Banking regulations crowd out those who can't meet those regulations from the market. This would be another reason why there would be more currencies in use. The market, not the government, should determine what is used for money, and how.

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John

(no subject)

from: johnny_red
date: Oct. 21st, 2006 06:23 pm (UTC)
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I address labor notes in a separate comment.

Carson's book is called Studies In Mutualist Political Economy .
It's available for free online here: http://www.mutualist.org/id47.html
I also have a copy which you can borrow. I recommend borrowing the book over reading it online.

I'll get back to the rest of your comment later.

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You know john...

from: funkyirishjew
date: Oct. 22nd, 2006 04:00 am (UTC)
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This is without doubt the BEST entry I think you have posted yet.
Infromative,
Innovative,
and backed by quoteable tracable facts.
If you are willing to do this much work for a Weed Garden topic you'd
flabergast Cowboy into silence :-)

-FIJ

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John

Re: You know john...

from: johnny_red
date: Oct. 22nd, 2006 06:35 am (UTC)
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One reason I took so long to respond is the time I was spending on composing an email to him on another subject.

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John

(no subject)

from: johnny_red
date: Oct. 23rd, 2006 04:53 am (UTC)
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It's an explanation of the problems inherent in overly large modern corporations. Each organization, and individual fulfilling a role in that organization, is a separate case, and will adhere to or deviate from what he describes here in some way. I'm sure you're familiar with the concept of economies of scale. There are also diseconomies of scale, which is what he talks about here. Carson explains in the book that if it weren't for some forms of government intervention in the economy, the size of many firms would be much smaller. An example of something from his writing that encourages this is the interstate system. When the federal government built this system, it subsidized the transportation of goods over long distances, so that more of some product can be sold by a given firm that the market would otherwise support. Paying for this system with more generalized forms of taxation instead of user fees continues this subsidy. Therefore, saying that a firm that benefits from this came into it's current situation as a result of a free market is absurd.

It's also an explanation of problems that arise when those who own something are not the same people as the owners. If the owners and the employees are the same people, as in a worker owned cooperative, the conflict between the interests of capital and labor disappears. All of one's bosses would have their positions at least partially because of one's decisions as an owner. The claiming of one's own work as his own, which I talk about in another comment, could only fully blossom if that person literally owns his workplace.

Management taking responsibility for the laziness of subordinates may be unfair, but that's what I experienced in management. I didn't handle it well. It does, however, make some sense. If the manager has to take responsibility for their behavior, he's more motivated to stop the unwanted behavior.

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(no subject)

from: anonymous
date: Oct. 19th, 2006 07:50 pm (UTC)
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Thanks a lot for the links and the nice comments, John.

I agree that internalizing incentives applies to workers as well as bosses. The problem now is that those at the top, or absentee owners, get the benefits of increased productivity, while those at the bottom get the speedups and downsizing. The people at the bottom are gaming the system quite rationally (in the sense of the old Soviet working class slogan "they pretend to pay us, we pretend to work.").

In a worker-owned cooperative, with management chosen by those doing productive work, all the costs and benefits of any policy would be fully internalized by those doing the work. And since management represented workers, there would be a strong incentive for workers themselves to sanction those who didn't pull their weight.

I have a similar reaction to Marxism. Despite some mistaken right-wing critiques, the Marxists don't view the law of labor-value as an ethical norm, but as something to be superceded. In the economy of abundance under full communism, they want to completely divorce consumption from effort. For the individualists, on the other hand, the law of value is a basic standard of justice.

On the question of work-effort and customer relations at your job, you might try looking for ways to save yourself effort that hurt mainly the boss, rather than either coworkers or the customer.

To take an example from hospitals, many use bar-code inventories to bill patients for supplies taken out of the supply room. Refusing to swipe the bar code saves you time, and saves the customer money. Likewise, dumping dirty linens in the trash and covering them up instead of taking them down the hall to the laundry hamper saves you time. Since the bosses' strategy is to work you harder in a given amount of time to save money for the company, saving yourself time by raising costs on the company would seem to be an ideal strategy for fighting back. The increased costs of supplies wasted or given away free can easily be double what the management thinks it's saving from keeping you understaffed. It's a great way for the powerless to fight back.

And restaurants are an ideal setting for what the Wobblies called a "good work strike." Give the customers free stuff, give them extra large portions, without charging extra. At Mazzios, a worker I knew was charged for a mistake pizza because he ate a slice of it. That worker (you can probably guess who) started putting extra large portions of all the ingredients on every pie, probably giving the customer the best pizza he'd ever had. By the time that worker (guess who) quit, he'd probably cost the company several thousand $$ in extra ingredients--all because some manager thought she'd save a few bucks.

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John

(no subject)

from: johnny_red
date: Oct. 22nd, 2006 06:30 am (UTC)
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Low pay and low quality work go hand in hand. This can be because the low pay is the reacted to in the "they pretend to pay us, we pretend to work." sense. It can also be because that kind of pay attracts workers who, as a general rule, act that way in any case. This attitude is encouraged by a lack of access to capital, which you point out. Another factor is the attitudes one learns towards work while growing up, which can be shaped by having parents in the same situation. I've also noticed that teenage workers whose livelihood is paid for by their parents often do poorer work, while attitudes change once one is working for survival.

All this being said, when they "game the system" they are also gaming me. In the case of those who prepare the food, it comes out late, cold, customers instructions on their food isn't followed, etc. When a customer is unsatisfied, he or she doesn't tip me and not pay for the food. The customer pays for the food, and doesn't tip me. $3.38/hr doesn't make up for that. I haven't recieved the assumed other part of the transaction, the tip. In the mean time, they make the same hourly rate. Even when the customer recognizes that I am not at fault, that customer may not come back. I have more interest in common with the other servers, and yet I still come in to work to find that they have left the place a mess.

If a worker-owned co-op is to be successful, it will be more likely to succeed if those who start it have a strong work ethic. If those who start it view "gaming the system" as acceptable work behavior, it will more likely fail. By the time the lazy worker fully realizes the need to alter his behavior, it may be too late. I've been reading Men Against The State, and I noticed that in Utopia and Modern Times they screened who could join the community. I'm sure this helped quite a bit in it's success by weeding out people whose presence would sabotage success.

I may not own the place that I work, but I refuse to concede the ownership of my efforts to someone else in spirit. I value doing what I do for a living well, and I want to work with people who have the same attitude. I would rather not work with people who don't. I do things which could be categorized as a "good work strike" as a part of my view on owning (or acting as though I own), my efforts. I have thrown out food someone who outranked me would have told me to serve (and in a few cases did) on several occaisions. I've also eaten waste food myself. However, this is a part of my desire to do the best job I can, which doesn't mean acting in the shareholders interests first, or in the interest of those who are gaming the system (which includes gaming me). I want to provide quality service, get appropriate support from everyone else, and reap the equivalent benefits for my work.

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John

(no subject)

from: johnny_red
date: Oct. 22nd, 2006 06:58 am (UTC)
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What I'm getting at is that for workers to become the type of people who are effective owners, they must adopt the attitude of owners, and reject the opposite attitude. We are, after all, talking about something that was called "bourgeois socialism", which should be a compliment, not an insult.

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I like that...

from: funkyirishjew
date: Oct. 22nd, 2006 07:50 am (UTC)
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And if they care about the profit, welfare, image, and sucess of the company, each feeling an attachment to it other than a paycheck, that relates then as emotional commitment, which gives them the impulse and concern to innovate, neh?

-FIJ

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John

Re: I like that...

from: johnny_red
date: Oct. 23rd, 2006 05:36 am (UTC)
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Mostly. Actually I'd prefer if the stockholders got less profit, and more of what comes into the company ended up in my and my coworkers paychecks. If there was a freer market, there would be more competition, and prices would be driven down to the point where profit would be much lower, possibly being nonexistent in many cases.

As for the image and welfare of the company as a whole, I only care about it as it affects the specific place I work, not much beyond that. There's no point in having that kind of commitment to the company as a whole unless you're an owner.

'm not advocating tricking yourself into thinking the interests of the owners and yours are the same, because this just isn't true. Claiming ownership of your work is something that happens despite the fact that you're working for someone else. It's better for people to own their workplaces because people have less reason to care about what they're doing when they don't. If you care about what you're doing, as opposed to resenting it, you're a more well adjusted and happier person.

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Wes

(no subject)

from: ghostwes
date: Oct. 22nd, 2006 08:43 am (UTC)
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Was this anonymous post by Kevin Carson? Sure sounds like him heh.

Very interesting thread. Thanks, guys.

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John

(no subject)

from: johnny_red
date: Oct. 23rd, 2006 03:14 am (UTC)
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It was. You're welcome.

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Wes

(no subject)

from: ghostwes
date: Oct. 22nd, 2006 08:50 am (UTC)
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I've experienced a lot of the same behaviour from my fellow wage slaves. It can be very frustrating, I agree. I usually chock it up to a lack of solidarity on their part.

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John

(no subject)

from: johnny_red
date: Oct. 23rd, 2006 03:16 am (UTC)
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I think that's more of a description of their behaviour than an explanation of it.

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Lieran

(no subject)

from: lieran
date: Dec. 4th, 2006 04:55 pm (UTC)
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As per your request, you have been added. :)

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